Ibex 35 dips 0.24%, drifting closer to year's lows

Shares of Naturgy fared best, adding 2.46% following a favourable arbitration ruling that will see it and joint-venture partner Eni receive €1.7bn from Egyptian authorities as compensation for the forced shutdown of the gas liquefaction plant at Damietta. Bankia (1.08%) and Amadeus (0.98%) were also at the top of the leaderboard.

Enagas also finished higher after disclosing the sale of a stake in Swedegas to First Satte Investments for €96.0m.

On the other end of the spectrum, auto parts-maker CIE Automotive skidded 3.03% lower on the back of the ongoing uncertainty around US-EU trade tensions.

Joining it at the bottom of the pile were Mediaset (-2.51%), Inditex (-2.11%), BBVA (-0.3%) and Banco Santander (-0.5%).

TECHNICAL ANALYSIS

Bolsamania.com's chief technical analyst, Jose Maria Rodriguez, cautioned that the Ibex 35 was right above its year-to-date lows reached in March and August, between 9,300 to 9,330 points.

"Looking at the technical aspect of the benchmark's heavy-hitters, specially Inditex, there seems to scant room for optimism," he said.

BBVA and Santander weren't looking much better, he added, nor Telefonica, which last week surrendered its bullish uptrend line dating several years back "with its shares having shed 12% over the past five sessions."

"Be very careful, if we lose the yearly lows, there is no significant area of technical support until the 9,000 point area and perhaps until as far down as 8,700. The latter marks its primary uptrend dating back all the way to 2012. Either that holds and a powerful rally ensues - which seems unlikely - or [...]."

EMERGING MARKETS AND THE US

Be that as it may, for now at least the Ibex 35 was simply battling to keep its head above water after having fallen by 5% in August. But it was facing powerful headwinds, not just from the ongoing trade frictions between China and the US, but also from the crisis in several EM currencies such as the Argentine peso (Macri is due to announce a package of emergency measures on Monday), Brazil's real and - of course - the Turkish lira (its central bank was due to meet on 13 September and it had already indicated that it will "adjust" policy after data published on Monday revealed CPI rising to an annualised pace 17.9% last month).

Commenting on the situation in markets, on Friday analysts at Danske Bank said: "Worries about the trade war are in full focus at the end of the week ahead of the end of the public consultation period for the US administration's proposed second round of tariffs on Chinese-made goods, this time on $200bn-worth, on Wednesday.

"Last week, President Trump also provided us with a timely reminder that the curent lull in tensions between Washington and Brussels is just that, a 'cease-fire'."

To take note of as well, and ahead of the approval of the new coalition government's 2019 budget law, which was expected in September, ratings agency Fitch lowered the outlook on Italy's long-term sovereign debt from 'stable' to 'negative', citing the political uncertainty in the country.

"The decision taken by Fitch is probably in-line with what markets were expecting, but can nevertheless be considered positive in so far as it reduces the risk of a sovereign ratings downgrade before September," Danske said.

For their part, the main Asian bourses finished mostly lower in overnight trading, clocking-in with losses ranging from between 0.4% to 0.8%, tracking a mixed close on Wall Street last Friday, ahead of the long Labor Day weekend.